An increasing number of wealthy individuals are investing in art as a way to provide for future heirs and build a family legacy. While art can be a valuable investment, knowledge is required to manage art assets appropriately. Coupling art and trusts is one way to prepare estates to protect your heirs and your assets.
In an attempt to keep wealthy clients through the generations, Citibank has recently begun offering classes on wealth management topics to heirs. One class on investing in art proves a great point about the need for experience and knowledge when dealing with investments and assets.
The class provides a few days of education regarding art valuation to students. Students are then invited to put what they learned into action in a mock art auction. A recent class used new-found knowledge to bid almost $100,000 on a portrait of Kate Moss. After the mock auction, the students were told that the portrait failed to sell the last time it was put up for auction--which means it wasn't as valuable as the class thought it was.
This story illustrates that a little bit of knowledge can be dangerous. The same is true when heirs are dealing with family wealth. If heirs don't have the right experience, then managing art or any other type of asset can be difficult and decisions can result in major asset losses for the family.
Anyone -- not only wealthy individuals -- can protect family assets by placing them in trusts. Working with a legal professional, you can create trusts for a variety of purposes -- even art trusts that protect your investments in creative heirlooms.
Source: NewsMax Finance, "How Citigroup Courts Wealthy Young Heirs: Teach Them to Buy Art," July 24, 2015